Regulatory Requirements And Restrictions

12 Months Ended

Dec. 31, 2011

Regulatory Requirements And Restrictions [Abstract]

Regulatory Requirements And Restrictions

Note 15. Regulatory Requirements and Restrictions

The primary source of funds available to the Company is the payment of dividends by the Bank. Banking regulations limit the amount of dividends that may be paid without prior approval of the Bank's regulators. As of December 31, 2011, there were no unrestricted funds available for transfer from the banking subsidiary to the Company without prior regulatory approval.

The Company (on a consolidated basis) and Bank are subject to various regulatory capital requirements administered by the Commonwealth of Virginia and Federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional discretionary, actions by regulators that, if undertaken, could have a direct material effect on the Company and Bank's financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and the Bank must meet specific capital guidelines that involve quantitative measures of their assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The capital amounts and classifications are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. Prompt corrective action provisions are not applicable to bank holding companies.

Quantitative measures established by regulation to ensure capital adequacy require the Company and the Bank to maintain minimum amounts and ratios (set forth in the table below) of total and Tier 1 capital (as defined in the regulations) to risk-weighted assets (as defined), and of Tier 1 capital (as defined) to average assets (as defined). Management believes, that as of December 31, 2011 and 2010, the Company and the Bank meet all capital adequacy requirements to which they are subject.

As of December 31, 2011, the most recent notification from the Federal Reserve categorized the Bank as well capitalized under the framework for prompt corrective action. To be categorized as well capitalized, an institution must maintain minimum total risk-based, Tier 1 risk-based, and Tier 1 leverage ratios as set forth in the table. There are no conditions or events since that notification that management believes have changed the Bank's category.

The Company's and the Bank's actual capital amounts and ratios as of December 31, 2011 and 2010, are presented in the tables below:

	Actual					Minimum Capital Requirement					Minimum To Be Well Capitalized Under Prompt Corrective Action Provisions
(Amounts in Thousands)	Amount		Ratio			Amount		Ratio			Amount		Ratio
As of December 31, 2011:
Total Risk Based Capital (to Risk Weighted Assets)
Consolidated	$	28,340		12.70	%	$	17,848		8.00	%		N/A		N/A
Bank of Lancaster	$	27,290		12.29	%	$	17,767		8.00	%	$	22,209		10.00	%
Tier 1 Capital (to Risk Weighted Assets)
Consolidated	$	25,546		11.45	%	$	8,924		4.00	%		N/A		N/A
Bank of Lancaster	$	24,509		11.04	%	$	8,884		4.00	%	$	13,326		6.00	%
Tier 1 Capital (to Average Assets)
Consolidated	$	25,546		7.97	%	$	12,815		4.00	%		N/A		N/A
Bank of Lancaster	$	24,509		7.68	%	$	12,768		4.00	%	$	15,960		5.00	%
	Actual					Minimum Capital Requirement					Minimum To Be Well Capitalized Under Prompt Corrective Action Provisions
(Amounts in Thousands)	Amount		Ratio			Amount		Ratio			Amount		Ratio
As of December 31, 2010:
Total Risk Based Capital (to Risk Weighted Assets)
Consolidated	$	28,013		11.99	%	$	18,697		8.00	%		N/A		N/A
Bank of Lancaster	$	27,024		11.62	%	$	18,610		8.00	%	$	23,262		10.00	%
Tier 1 Capital (to Risk Weighted Assets)
Consolidated	$	25,088		10.73	%	$	9,349		4.00	%		N/A		N/A
Bank of Lancaster	$	24,112		10.37	%	$	9,305		4.00	%	$	13,957		6.00	%
Tier 1 Capital (to Average Assets)
Consolidated	$	25,088		7.54	%	$	13,303		4.00	%		N/A		N/A
Bank of Lancaster	$	24,112		7.27	%	$	13,260		4.00	%	$	16,575		5.00	%